Editor's note: The author of this piece has worked as an organizer for the 10-to-1 wage ratio campaign at St. Mary's College.
On Sunday, November 24, Swiss voters rejected an initiative that would have capped executive pay at 12 times that of their companies' lowest-paid employees.
Although the initiative failed, discomfort with high executive pay remains.
Some companies in the United States have tried to address the problem with a salary cap similar to the Swiss initiative. The Ben & Jerry's ice cream company used to have a 5-to-1 salary ratio. Later it was expanded to 17-to-1, before transnational food company Unilever purchased Ben & Jerry's and made its salary structure a secret.
Tens of thousands of people have signed a petition demanding that Congress cap the salaries of corporate CEOs, which can be up to 500 times what their companies' lowest paid-employees receive.
At St. Mary's College, a small school in southern Maryland, faculty, staff, and students have launched a wage ratio proposal of their own. For them, the magic ratio is 10-to-1.
By capping high-level administrative pay, the authors say, the school will eventually save money and be able to rein in tuition hikes.
While the lowest paid staff at St. Mary's make $24,500 per year, the highest paid employee, the president, makes over $300,000. Furthermore, according to faculty calculations, most employees are seeing their income lose value over time. Campaigners say if the school truly valued social responsibility, respect, and community maintenance, as it claims to do on its website, the wage structure would be different.
St. Mary's is not the only college with a living wage campaign. Others include Johns Hopkins University, Miami University, and the University of Virginia. Some campaigns, including those at Swarthmore and Harvard, have resulted in higher wages for the lowest paid workers on campus—as did the original incarnation of one at St. Mary's.
That campaign, now known as "St. Mary's Wages, the St. Mary's Way," began in 2002 when staff passed a unanimous resolution to institute a living wage on campus. By 2004, the lowest salary on campus had risen from $15,700 to $20,000. In 2006, frustrated by stalled salary negotiations and what they saw as the poor treatment of the lowest-paid workers on campus, 13 students participated in a 147-hour sit-in at the office of then-president Jane Margaret O'Brien. The occupying students included one former and four current senators from the Student Government Association.
Current students still cite the sit-in as a major turning point in staff and student negotiating power. Afterwards, management went into negotiations with the staff union and agreed to increase the salaries of the lowest-paid staff at St. Mary's to $24,500. Then the living wage campaign was quiet until fall of 2011, when, spurred by staff testimony about financial difficulties, students and a few faculty members launched the 10-to-1 initiative.
The 10-to-1 wage plan would cap the salary of the highest-paid full-time college employee at 10 times that of the lowest-paid ones, and the salaries of the remaining employees would be spread out incrementally between the two. By capping high-level administrative pay, the authors say, the school will eventually save money and be able to rein in tuition hikes.
The campaign gained momentum in 2011 when students learned that high-level administrators earned raises during a statewide wage freeze. Most college employees went without raises that year, but a loophole allowed staff deemed "essential" by the state of Maryland—including the president and members of his cabinet—to earn thousands of dollars in bonuses.
In response, students organized multiple forums, crowded into meetings of the Board of Trustees, marched across campus, and rallied in front of the president's office. Spurred in part by frustrations with the administration, faculty made moves to propel the 10-to-1 proposal through formal channels. The plan was officially launched in September 2013, along with a website detailing the campaign's history.
Thinking through the implications
But wages are a touchy subject. Many economists argue that capping them will negatively affect labor markets, sending talent elsewhere. As St. Mary's College economics professor Alan Dillingham told the Baltimore Sun, "You can get a [university] president for probably $150,000, but that might not be the kind of person you want."
Even without the implementation of a wage cap, some say a similar dynamic is already playing out on campus.
The school is already making moves to address some salary concerns.
"I have a computer scientist who has been … programming here for six years and he makes around $55,000," said Chris Burch, associate director of enterprise systems and web services at St. Mary's. "A fresh-out-of-college … computer science major could go to [Patuxent River Naval Air] base and make $65,000 right out of the gate, and with good ratings, will be around $81,000 in three years. I can’t pay fair wages for the type and background of work that we need."
However, Burch says he supports the proposal. "I love this idea," he says. "We have an increasing gap between rich and poor as a national issue."
On the Frequently Asked Questions page at the campaign's website, the organizers advocate developing administrators internally—that is, promoting employees who understand the institution and its goals instead of plucking workers from other institutions with promises of high pay.
"While there is some risk of higher turnover by instituting a cap," the page explains, "we should note that paying market wages is no guarantee of getting excellent (or even competent) executives."
The wage cap would not change the $300,000 salary that the president currently makes, which is well within the norm for public schools. Instead, it would increase the pay of the lowest-paid workers to $30,000 and prevent further increases to the president's salary.
School of hard knocks
For some, the question of securing quality administrators is second to more immediate concerns. Student organizers say that most of the schools' lowest-paid workers live in poverty and aren't respected for their work.
"The administration treats them like they're expendable, replaceable—some have even said so explicitly," said John Mumby, a former campaign organizer. "And that's not the St. Mary's way.”
In 2011, staff submitted anonymous letters to faculty detailing their economic hardships, which were then posted to a campaign Facebook page. One worker described living "paycheck to paycheck" and said she often needed to borrow money to send her children on school field trips.
The school is already making moves to address some salary concerns. Beginning in 2013, the school instituted a temporary salary reduction for its highest-paid workers. Those making $150,000 and above saw their pay decrease by 5 percent; those making less than that retained their full salaries. Temporary reductions to salaries elsewhere on the pay scale ranged from 0.75 to 2.5 percent.
The school would need about $270,000 to pay for the 10-to-1 proposal. The money is available: enrollment numbers were lower than expected, so the school required all departments to make budget cuts for the 2013 fiscal year. According to the St. Mary's Wages website, the requested cuts left an unexpected surplus approximately equal to the $270,000 needed for the proposal.
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In order to be implemented, the plan needs to be approved by the St. Mary's Board of Trustees.
Gail Harman, the chair of the board of trustees, said that the proposal has never come before the board, so its members haven't spoken about it. Chip Jackson, vice president of business and finance, also said the proposal's authors had not reached out to him. The president's office was contacted for comment but did not return the call.
Meanwhile, the proposal's organizers say they are preparing their next steps. Staff, students, and faculty are submitting proposals to their respective governing bodies, including the Faculty Senate and the Student Government Association. If ratified there, these proposals will be brought before the Board of Trustees.
Meanwhile, the school is conducting a search for a new president. Organizers say they're hoping the new executive will be willing to accept a salary cap and push for the proposal's implementation.